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Drawing money from a property ‘cash machine’ is over and home owners will have to live within their means, a senior banker has predicted.
Speaking at the Building Societies Association annual conference in Birmingham, Credit Suisse’s senior adviser Robert Parker has claimed mortgage rules will stop home owners taking money from property values stoked by inflation.
He said: “One area I think the game is frankly over is UK consumers using their houses as a cash machine.
“If you assume as I do that UK house prices are going to flat line for the next two to three years or longer and if you assume more prudent mortgage standards, I think this issue of equity withdrawal from the housing stock will probably remain very limited.”
Banks and building societies approved more mortgages in March, according to the latest official figures.
Meanwhile, the Bank of England reported approvals to buy a home hit 47,557 – the highest level over a disappointing winter.
Remortgages slipped back by just over 8% to 32,116.
The full details of the Bank of England report are below:
The Building Societies Association has also released mortgage lending figures for the same period.
The mutuals approved £2.1 billion of the £4 billion for home purchases in March – an increase of 29% from February.
Adrian Coles, Director-General of the Building Societies Association, said: “There was a significant rise in the value of mortgages approved by mutuals in March. Indeed, across the first quarter of 2011 mortgage approvals by mutuals were 28% greater than in the same period a year earlier.
“However, these are increases from very low levels, and compared to previous times activity in the mortgage market remains subdued. This is largely because economic uncertainty continues to affect confidence in the housing market.”
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